PEP up 56 per cent for Bakers’ London partners

Average profit per equity partner (PEP) at Baker & McKenzie’s London office rose 55.5 per cent to £650,000 in the 2009-10 financial year.

Gary Senior

The firm also projects a net profit rise of 56.2 per cent from £25.1m to £39.2, on a turnover of £120.3m – up 4.6 per on 2008-09.

The figures are in contrast to what was a difficult 2008-09 for the firm, when turnover fell 3 per cent and PEP dropped 33 per cent. The recovery in the last financial year, which runs from 1 July 2009 to 30 June 2010, means all staff in London will receive a 4 per cent bonus.

London senior partner Gary Senior, who was reelected for a third term earlier this year, said: “Few firms in the UK have seen an increase in turnover so we’re obviously very pleased. Half the practice is transactional and that’s where we’ve had the most growth.”

He added: “We still don’t feel we have the bench strength we’d like, and we’re still looking to grow through lateral hires.”

Meanwhile, the firm’s global revenue saw a slight dip of 0.4 per cent to $2.104bn (£1.329bn), while PEP was up 13 per cent to $1.125m (£771,000) and net profit up 12 per cent to $806.3m (£509.5m)

Global chair John Conroy said: “We’re genuinely gratified by these results, but we’re far from satisfied. We’ve more work to do and are presently challenging ourselves to raise the bar still higher.”

The growth was partly driven by a 25 per cent increase in revenue from the firm’s capital markets practice, which has been particularly strong in the Asia Pacific region. The firm has also reduced its headcount in the last year, including around 80 staff in London.

Conroy added: “Like other firm’s we’ve been focused on costs, but for us it’s been a V-shaped recovery and we’re now hiring again in North America and Europe.”

Conroy stands down as chair of the firm’s global executive committee in October after six years in the role, when he will be replaced by former Brazil managing partner Eduardo Leite.

He does not anticipate any change in strategy when Leite takes up the position. “I think there’s a general sense that pursuing our current strategy has led the firm to where it is now,” he said. “There’ll always be some shift with new leadership but I don’t anticipate any major changes.”

The firm intends to continues its investment in the BRIC countries and is anticipating an uptick in transactional work. In 2009-10, 39 per cent of global fees came from Europe and the Middle East, 35 per cent from North and Latin America, and 26 per cent from Asia Pacific.

The firm estimates that around $25m (£15.8m) was saved through its legal and business outsourcing centre in Manila over the last year.

I wonder how much longer those in ‘silver circle’ firms will keep sneering at Baker & McKenzie as the ‘McDonalds of law firms’, now that its London office alone is bigger than many of them in terms of turnover and has a comparable PEP.